Our Perfect Opportunity to Start in Real Estate Investing

Perfect opportunity!

When we started our life together we rented a room from a friend who had extra space and could use the additional income. It was the “perfect timing opportunity.” One year later we started looking for a house of our own.

When we realized it was a good time to buy, we chose to find a two-family property, so we could live in one and rent the second to help pay the mortgage. It seemed to be the only way we could afford our own place since we were starting our financial lives over.

When you find the right property, and you plan to live there for at least a year, you could be eligible for a Federal Housing Administration loan. An FHA loan requires only a 3.5% down payment, but the house must be habitable. It can’t have things like peeling paint or mold. In addition, a person only needs a good credit score to qualify for an FHA loan. Even if a person’s score was between 500 – 579 they would still only have to put down 10%. This is the ideal property for a first-time house hacker.

Our House-Hack

We looked at approximately five multi-families before we found “the one.” It seemed our agent knew what she doing. She showed us a couple of horrible rehabs that day and then showed us this one. When she walked us through it, we fell in love. It did happen to be the only turnkey property she showed us. While she and Bob were inside talking, I took a walk outside and played with the colorful fall leaves in the yard and took a minute to look around. What I saw were picket fences and elderly neighbors raking their leaves. It seemed peaceful in what is sometimes a very harsh city.

It seemed perfect!

Even though we had some financing issues, at the last minute, we were able to pull it off. Since the bank was considering the potential rental income as our income at first, I did what I had to do to get it rented, sight unseen. I used an app called Turbo Tenant. I copied the listing pictures and posted the rental on the website which automatically lists it on every rental website, including Zillow and Rent.com.

We only had about a half dozen people interested. And I only met with two. They had paid for and submitted their background checks through Turbo Tenant already. Shockingly enough, nobody would consider signing a lease without seeing the apartment. I know, right? We were able to get into the apartment for one showing before our closing date. She fell in love with it and signed the lease on the same day.

She is still with us and has spoiled us rotten.

We had several friends and some family members warn us against making friends with our tenants. But when you live in the same building and they’re young enough to be your children, it’s a difficult feat. She is now considered one of our children and will always be special to us.

So, the rent covers the whole mortgage, while we cover the escrow account which pays for the taxes and insurance. Thanks to COVID, we refinanced at a much lower rate and are much closer. Our plan is to continue contributing the same amount to the housing account and quickly save up for our next property.

Always plan for the future and don’t take your blessings for granted.